OSC Proposed Rule For Federal Contractor Employees May Cause Confusion

Washington, D.C. January 22, 2015. Today the U.S. Office of Special Counsel (OSC) proposed a rule that it claims would extend protections under the Civil Service Reform Act and the Whistleblower Protection Act to employees of Federal contractors. However, the unintended consequences of OSC’s proposed rule may cause more harm than good for employees of federal contractors.

This rule may cause confusion and interfere with other preexisting rights contractors have under other laws. OSC should reconsider whether such a rule is even necessary given that employees of contractors already have stronger whistleblower protections under state and federal law than federal employees. In any event, if the proposed rule is enacted it should be amended to make sure this confusion or weakening of other rights does not occur.

As grounds for this new rule OSC cites 41 U.S.C. §4712, which is a law Congress enacted in 2013 that weakened pre-existing whistleblower rights for employees of federal contractors. Under that law, contractor employees have a right to disclose “gross mismanagement of a Federal contract or grant, a gross waste of Federal funds, an abuse of authority relating to a Federal contract or grant, a substantial and specific danger to public health or safety, or a violation of law, rule, or regulation related to a Federal contract (including the competition for or negotiation of a contract) or grant.” 41 U.S.C. §4712(a).

However, the most effective tool to uncover and punish government contracting waste and fraud against the United States is the False Claims Act (FCA). The FCA provides enhanced protection, double back pay and rewards for employees who expose violations of law and misuse of federal monies. The FCA has mandatory reporting requirements that are not reflected in the OSC’s proposed rule. The failure of whistleblowers to follow these rules could disqualify them from enhanced protection under the FCA, and could undermine their ability to collect a reward under the FCA or other qui tam laws. In fact, the OSC does not even mention the more significant rights that federal contracting employees have under the FCA.

Since 1986, the Department of Justice, working with whistleblowers, has collected $25 billion from corrupt contractors and well over 1,000 whistleblowers have benefited from the FCA’s enhanced protections. It’s concerning that the OSC, which does not have adequate resources to protect Federal employees, would propose to expand to an area that is already covered by the DOJ. In addition, the OSC’s proposed rule does not contemplate informing contractor employees of their rights under the FCA. Nor does the OSC’s propose rule state whether and under what circumstances information disclosed by federal employee contractors might be shared with the DOJ, which since 1986 has had primary jurisdiction over litigating cases under the FCA, or with other federal agencies or inspector generals that investigate fraud, waste and abuse.

The public has until March 23, 2015 to submit a comment on this proposed rule. Whistleblowers and whistleblower advocates should consider submitting comments asking the OSC to either withdraw or amend this proposed rule to eliminate confusion and to prevent Federal contractor employees from acting in a way that might disqualify them from enhanced whistleblower protections under the False Claims Act.

Additional blog posts on this topic will be published in the near future.

Information on how to submit a comment on the proposed rule can be found on the Federal Register’s page for: Revision of Regulations To Allow Federal Contractors, Subcontractors, and Grantees To File Whistleblower Disclosures With the U.S. Office of Special Counsel.


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